Is a Lack of Employee Recognition Damaging to Company Performance?

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Mar 22, 2012

Is a lack of employee recognition damaging to company performance?

In short — yes. And if you don’t understand why, you should probably read on.

It’s been researched, published and proven: engaged employees drive business results. Based on a combination of studying companies’ financials and conducting engagement surveys, HR industry analysts stand behind the performance and engagement equation.

While the hard facts have been signed, sealed and delivered to employers, it’s not rocket science that people who are recognized are more invested in the success of business. They are infused with a mission and feel responsible and accountable for how well the company performs.

4 negatives coming from disengaged employees

But perhaps employers need to consider the repercussions of a disengaged workforce to truly understand the damaging effects lack of recognition has on a company. Typically, disengaged employees are directly affiliated with:

  • Increased turnover rates;
  • Decreased employee empowerment;
  • Unsatisfying performance results; and,
  • Poor team culture.

That’s right; all of your biggest problems can be attributed to one problem: disengagement. This may be surprising, but what comes as even more of a shock to employers is how easy the solution is to overcome disengagement and turn around business results.

Recognition is the best form of feedback. Failing to recognize workforce’s accomplishments as an employer means your team is less likely to drive results.

Managers and leaders alike should use recognition to drive the bottom line and foster a meaningful relationship with their teams. Today’s employees want to be acknowledged for successes affecting the company and are more inclined to drive results when their work is celebrated. Recognition increases productivity and creates a culture of engaged employees, positively affecting your company’s bottom line.

Why you should recognize workers

What’s more is that recognition is not complicated, in fact, it’s completely to the contrary. Recognition is simple and comes quite naturally to people outside of the workplace. Think about when you’ve said “thank you” or “great work” to someone. There are many reasons why you may have applauded that person or team:

  • To make them feel good and validate hard work. Recognition makes the person recognized feel accomplished, but it also makes the recognizer feel great to share their approval or admiration.
  • To drive positive behaviors. What gets recognized gets repeated, so telling someone what you saw what they did encourages them to achieve again.
  • To increase your reputability. If people know that you recognize other’s accomplishments, you maximize your team player profile, attracting great talent to your teams due to reputation.
  • To secure future results. People will be more willing to help, or drive results, later when they remember how they were recognized and encouraged before.

You say thank you to the Starbucks barista every day and you congratulate your children on their great marks – so why aren’t you recognizing your employees? The reality is that a “thank you” is much more powerful than a bonus. Take this and couple it with the fact that it is entirely aligned to business success. Makes you wonder why you’re not recognizing more, doesn’t it?

Recognition changes the employment relationship; it encourages teamwork and camaraderie, reinforces company culture and taps into discretionary effort. For management, not only are these elements directly related to achieving targets and goals, but it’s also a reflection of effective leadership.